The Kenyan economy is expected to rebound to 6.6 percent in 2021 reinforced by the prevailing stable macroeconomic environment and the ongoing implementation of the strategic priorities of the Government under the “Big Four” Agenda and Economic Recovery Strategy.
Speaking in Parliament during the 2021/2022 budget reading, Kenya’s Treasury Cabinet Secretary Ukur Yatani said,total expenditures in the FY 2021/22 budget are projected at Kes 3.03 trillion equivalent to 24.5 percent of GDP from Kes 2.89 trillion equivalent to 25.8 percent of GDP in the FY 2020/21 budget.
Recurrent expenditures will amount to Kes 2.0 trillion or 16.2 percent of GDP.
In 2020, apart from the Covid-19 pandemic, Kenya’s economy experienced two other shocks; the invasion of desert locusts that damaged crops, and floods that caused loss of lives and livelihoods, displacement of people and destruction of infrastructure.
Given the impact of these shocks, Kenya’s economic growth for 2020 declined to 0.6 percent from 5.4 percent in 2019.
Yatani said to support this growth outlook, the government must continue to maintain macroeconomic stability.
“Inflation which stood at 5.9 percent in May 2021, is expected to remain within target range of 5.0 percent with a margin of 2.5 on either side, supported by prudent fiscal and monetary policies. Interest rates will be expected to remain low and stable supporting growth of private sector credit,” said the CS.
The CS said the balance of payments is also expected to be strong with the current account balance projected to remain at 5.2 percent of GDP.
Further, the rebound in horticulture and tea exports as well as increased inflows of remittances will support build-up of adequate levels of official foreign exchange reserves creating buffers against short-term shocks in the foreign exchange market.
Kenya Budget “Build Back Better”
Going by the theme of the 2020/2021 Budget “Building Back Better: Strategy for Resilient and Sustainable Economic Recovery and Inclusive Growth,” Yatani said it will fast track implementation of programs and projects under the “Big Four” Agenda to enhance food and nutrition security, achieve universal healthcare, provide affordable housing and support growth of manufacturing sector for job creation.
“Similarly the government will maintain macroeconomic stability and enhance security to foster a secure and conducive business environment and security of Kenyans and their properties,” – Treasury CS Ukur Yattani.
Kenya’s government also plans to scale up development of critical infrastructure in the country such as roads, rail, energy and water to reduce the cost of doing business and ease movement of people and goods as well as promote competitiveness.
Further enhance investment in key economic sectors for broad based sustainable recovery by promoting agricultural transformation, growth in manufacturing, environmental conservation and water supply, stimulating tourism recovery, and sustainable land use and management.
Expansion of access to quality social services in health, education and appropriate social safety nets for the vulnerable population is also a priority according to the CS.
Government plans to support the youth, women and persons living with disability through Government funded empowerment programs that leverages on partnerships with private sector organizations.
Yatani said the government will support the County Governments through transfer of sharable revenues to strengthen their systems and capacity in service delivery and implement various policy, legal and institutional reforms to enhance efficiency of public service delivery.